Alzheimer disease (AD) is the leading cause of age-related dementia, affecting over 5 million people in the United States alone. Unfortunately, current therapies are largely palliative and several promising drug candidates have failed in late-stage clinical trials. Hence, there is urgent need to improve our understanding of the basic mechanisms that drive the development of late-onset AD. Recent genetic studies have uncovered a number of genes that influence the risk of developing AD. While many of these gene confer small increases in the risk of AD, one recently discovered gene, triggering receptor expressed on myeloid cells 2 (TREM2), increases AD risk by about 3-fold. Yet the function of TREM2 in the brain and its role in AD pathogenesis remains largely unknown. Here, we will perform a number of studies to test the hypothesis that mutations in TREM2 impair microglial-mediated clearance of beta-amyloid (A?), exacerbate the pro-inflammatory induction of tau pathology, and alter neuronal health. To achieve these goals, we will generate induced pluripotent stem cells (iPSCs) from AD patients carrying the R47H mutation in TREM2. This mutation will then be repaired using TALEN-mediated gene editing technology to create isogenic mutant and control iPSCs. As microglia are the primary cell type within the brain that express TREM2, we will differentiate iPSCs into microglia and examine the effects of TREM2 mutations on microglia function. First, using in vitro approaches, we will quantify the effects of TREM2 R47H mutations on microglia migration and activation state, A? phagocytosis, and neuronal viability. As microglia are inherently plastic cells, their function and activation state s dramatically influenced by other cell types within the brain. We will therefore also study the effects of TREM2 mutations in vivo by transplanting iPSC-derived microglia into two novel xenotransplantation-compatible transgenic mouse models of AD. Examination of these mice will allow us to determine whether TREM2 mutations alter the degradation of A? or modulate the progression of tau pathology in vivo. Using fluorescence activated cell sorting approaches we will also determine the impact of AD pathology on microglia gene expression and activation state. Together, these studies hope to decipher the mechanisms by which TREM2 mutations influence AD and provide a broader understanding of the role of microglia and inflammatory processes in AD pathogenesis.